Dawnay Day Carpathian Share Discussion Threads

[jonwig] 04/7/2008 07:34

Mark, if you've time for me to fit in one more question ...

I've banged on a few times about the level of Admin Expenses at DDC: not costs of running the portfolio, but central costs, mostly management rather than board.

These are the GAVs and AEs of the three DD companies:

DDC ... £ 565m ... £4.7m ... 0.8% ... (31/12)
DDS ... € 376m ... €2.3m ... 0.6% ... (31/03)
DTR ... €2333m ... €4.4m ... 0.2% ... (31/12)

- which confirms my point. I'd be interested in how they account for the discrepancy, and whether they see AEs falling rather more into line with the others. (Halving them would be 1p/sh on the divi, for example.)

[ydderf] 04/7/2008 03:57

the main question to ask is how can the directors align their interests with the shareholders - the shareholders do not participate in the generous incentive schemes and it is difficult to see how thus tension can be resolved. i have always been deterred from investing in theses aim property projects because they seem to be set up primarily for directors and insiders with shareholders as investment fodder....

[cnx] 04/7/2008 03:10

marben

following on some points raised by scanejete2 above, my main interests are:

1.how confident are the directors that funding is available for all planned developements in the planned time frame?

2.i would support a further reduction in dividend payments if such savings are to be used for new ,unplanned attractive investment opportunities which must now be appearing. i would see a profitable exit in not more than 2-3 years.
does this fit in with their thinking should such opportunities present?

thank you for your efforts

[hectorp] 03/7/2008 23:01

Yes, but is about to be called a burts bubble, as is zinc for example, though they may well not be, and return to strenght in a couple of months.

skanjette a multitude of points - but where would marben start!

[nickcduk] 03/7/2008 22:07

Worth putting into context. Coal price is back to where it was last week. Still up massively for the year.

[aleman] 03/7/2008 20:41

Commodities are peaking one buy one. Dairy, wheat and base metals are all down from February. Coal is a much more interesting development. It could be interesting if G8 countries slowing down is killing commodities while Eastern Europe and BRIC countries motor on. Nothing to do with falling money supply of course. ;-)



Coal prices plunge as traders take profits
By Ambrose Evans-Pritchard
Last Updated: 1:09am BST 03/07/2008



Coal prices have tumbled from record highs earlier this week as buyers sit on their hands, setting off a scramble by hedge funds to liquidate speculative positions.

Newcastle and South African cargoes have plunged by over $20 a tonne in the last day, apparently triggered by fears of a European economic slowdown and concerns that the coal shortage in China might not be quite as extreme as supposed.

The sudden change in market psychology could be a warning sign for the oil and gas markets, where frenzied buying has pushed prices to levels once unthinkable.

While coal moves to its own distinctive rhythm, it tends to chime with the rest of the energy market.

[skanjete2] 03/7/2008 20:02

Dear Marben,

Following questions come to mind :
- what's their opinion on the current account situation (negative) and negative trade balance in some eastern european countries? Do they expect it to have consequences on the currencies and general economies? How do they prepare for such possible outcomes?
- what's the situation on the financing front? Is debt still available at a reasonable rate? What is the exact impact and the direct consequences of the credit crisis on their business?
- how is the market doing for their type of investments? Are there any transactions in their segment they can refer to? Do they expect to have to sell assets in order to cover the divident?
- how do they manage the inflation problem of the development costs? What percentage of yearly inflation do they take into account?
- What do they plan to do on the undervaluation of the share? Why don't they repurchase their shares, or sell some assets to underline the value of their assets (Is that value rising or falling at the moment). Are they considering a kind of "strategic review" as Dawnay Day Treveria did?
- By lowering the dividend, they kind of artificially boosted their NAV. The management company is being compensated based on the NAV. Do they acknowledge this, and do they expect to correct this in future (for example by a special divident if conditions allow it)?

kind regards,

[hectorp] 03/7/2008 19:41

Yes K-buy I expect you are correct.

- Forget that question Marben.

[kimboy2] 03/7/2008 19:08

I think it may be the case in these EE countries that the affluent tend to live in the cities and towns and not in villages etc.

I suspect that the cities are bubbles around which a much poorer and more rural way of life goes on.

The attraction of the EE is that the fast increasing GDP is causing a burgeoning of a new middle class, which will primarily be our customers, and an increased penchant for a westernised lifestyle.

[hectorp] 03/7/2008 18:41

I agree they are not.
Also I expect you are correct with the 'big cities' in which case DDC Mall properties are in fairly big towns not county towns where I am near.

I am thinking from my own viewpoint: My county ( is this typical- I think not- of Yorkshire or Co Durham or Northumberland or Cumberland) ) has a small town 5 miles away with TESCO ASDA and Morrisons. We have a small City ( Stirling) around 9 miles away ( TESCO SBRY ) SO , most of us only have to drive 6 miles average to malls. However in our local villages , there is the Co-Op or Spar type shops.
I find Co-op is 20-30% more expensive that TESCO etc! this is the key point.
If spenting more than £10.00 , the £2.00 return cost to travel to the TESCO store, makes that journey worth it. Also one has to go to the MALL spots, to get pet-rol.
I would be interested to find out if this is the overall situation in Poland etc.
H.

[kimboy2] 03/7/2008 18:33

It would be interesting to have some detail on how DTZ did the NAV calculation. For example the zloty has strengthened by about 16% against the £ since 31/12/07.

Does that mean, all other things being equal, that the NAV of the Polish assets have gone up by 16% ?

[marben100] 03/7/2008 18:13

Good Q's - keep 'em coming. :0)

Re out of town malls. I'll certainly ask but my initial thoughts are these:

The BBC comments make sense wrt large cities like London, Manchester etc. AFAIAA DDC's properties are more locally oriented. I should think their target catchments are probably within 10km or so max. At that sort of distance, I don't think fuel costs will play too much part in shopping decisions.

However, rapidly rising prices generally will clearly cause shoppers to tighten their belts. The question for CEE is whether incomes are rising faster than prices? In the UK, I'm sure they're not.

[hectorp] 03/7/2008 18:02

That MAY be good for DDC but I find it very hard to elucidate - all I know is we are not in Sterling -related investments which is for the good.
I believe Sterling is about to lose another 2-3% agaisn the Eurp pretty soon too.
I note again Ydderf 's increasing appearance . 'freddy' is not interested in such shares unless he is limbering up to buy some. Whats your price?

- DDC 125p now DDC 48-9p.. 65% falls is extreme. It is outrageous.

[hectorp] 03/7/2008 12:52

marben,
Might the Directors have any view on the 'effect of consumer choice in the face of increasing car costs, which in the UK is starting to have an effect on out of City Centre Mall type shopping ' ( I quote from today's Radio 4 noon consumere programme. )
Apparently over 20% of UK shoppers are deciding to 'walk to their local shops'
Clearly, the placing of DDC's mall properties is even more significant now, ie, how many are out of town and how many are central.
H>

[fugwit] 03/7/2008 12:24

marycurer- great call, certainly helped me rethink topping up in the 50's. Care to make the next call. (apologies for the freeload but not up to speed on TA yet, got the course booked for Nov though) dyor caveat understood etc.

marben100- good news, your last was v.informative. Not sure if it is an acceptable Q but I am curious as to the small directors holdings and not having seen any buying. Wouldn't becessarily expect to see it and pretty smart so far on their part but would be interested in comment if any. Ta.

[kimboy2] 03/7/2008 11:34

Coffeheaven might be an interesting company to look at as it leases stores in EE countries. I know that they have recently been having to pay 'key money' for stores in Poland for the first time.

[marycurer] 03/7/2008 11:14

Are we there yet :)

[hectorp] 03/7/2008 11:12

Most helpful marben and Cezary.
If meeting with the Directors at DDC, perhaps you could let Peter Temple and
his colleage Nick Louth on the FT know of any interesting outcome?
H.

[marben100] 03/7/2008 10:59

BTW for general info, I have arranged to meet with DDC next week. Please let me know if there are any questions you'd like asked, to add to my own list. I will report back.

[marben100] 03/7/2008 10:53

jonwig - precisely! Thanks. Also worth considering that all those new offices opening (and filled) in that district should help the attractiveness of the retail properties DDC has bought there.

Quite right to point out that SEGRO's sale was office rather than retail but I think the two relevant aspects are a) that this shows that transactions are happening, even in the current climate; and b) the sort of rental yields properties can be sold on. OTOH, for balance, I should point out that the Marina Mokotow property is a very small part of DDC's portfolio: €9.2 originally; recently added a further €2.8m. See .

According to my calculations, the average CURRENT rental yield on DDC's properties, using the December 2007 valuation, is 7.2%. My conclusion is that there is more likely to be upside to those valuations than downside, providing rental income doesn't fall.

[cezary] 03/7/2008 10:41

Jonwig....
For those people that don't know Warsaw the point I was making is that its not 'Central Business District' but another 'Business area' in another suburb of Warsaw. It doesnt detract from the point that it is an up and coming area near to the airport.
The Main suburbs of Warsaw are:- Srodmiescie, Wola, Praga, Ochota, Mokotow, Zoliborz.

[jonwig] 03/7/2008 10:34

The point, surely, is that the "Mokotow Ditrict" mentioned in Mark's post contains the Marina Mokot shopping/residential acquisition announced by DDC on 18/06.

[hectorp] 03/7/2008 10:08

fair enough C..

[cezary] 03/7/2008 10:06

FRom my knowledge of Warsaw, Mokotow is not exactly central Warsaw.
Yes it might be off one of the main roads into Warsaw... Pulawska joining Marszalkowska but its nearer to Ursynow than Central Warsaw.